Anthem Blue Cross vies with Toyota for most clueless award

Anthem Blue Cross may have made the biggest blunder since Martha Coakley and the Massachusetts Democratic Party took outsider Scott Brown too lightly -- or since Toyota decided to mar its reputation for quality though a series of self-inflicted wounds -- by jacking up individual rates for California policyholders by as much as 39 percent.

And doing so right after President Barack Obama’s health reform package hit a brick wall in D.C. made it even more apparent that Anthem wasn’t paying attention.

How intent, after all, are Anthem and parent WellPoint Inc. in proving to critics of for-profit health care that their worst fears are on target -- and to supporters of incremental reform that they may have sipped the wrong Kool-Aid?

The story, first reported by the Los Angeles Times in a lengthy piece last Friday, percolated over the weekend, but California Insurance Commissioner and Republican gubernatorial hopeful Steve Poizner got his take in late Friday, repeating it Monday morning for those who missed it in the excitement of Super Bowl weekend.

“I’m alarmed by the Anthem Blue Cross health insurance rate hikes, especially in a time when the recession has forced so many people into the individual health insurance market,” the Commissioner thundered. “State law requires that insurers spend at least 70 cents of every dollar of premium on medical care. I have instructed my department to hire an outside actuary to examine their rates line by line to ensure they are complying with this state law. If we find that their rates are excessive, I will use the full power of my office to bring these rates down. “

Poizner also pointedly reminded Californians “who have to purchase individual health insurance” that there are dozens of insurance companies to choose from, although he didn’t note that most such consumers have little leverage with those insurers. The commissioner helpfully provided a link to Anthem Blue Cross’s competitors in his statements, adding “As a consumer you need to shop around. A different provider may prove to be a better value for a particular individual or family’s needs, and all of them are looking for new customers. I encourage consumers who are not happy with their rates, co-pays, benefits or service to look at other options.”

The Anthem increases are set to take effect March 1.

Not to be outdone, the Obama administration and Health and Human Services Secretary Kathleen Sebelius chimed in Monday with their own scathing critique, demanding that Anthem “publicly justify” its decision to send individual rates in California soaring by up to 39 percent. In her letter to Anthem Blue Cross President Leslie Margolin, Sebellus notes that Anthem Blue Cross’s parent company, WellPoint, made $2.7 billion in profits during the fourth quarter of 2009.

Anthem’s increases “are up to 15 times faster than inflation,” Sebelius wrote to Anthem’s Margolin, “and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”

Anthem, with a tin ear to public opinion and political repercussions matched recently only by Toyota Motor Corp., has been trying to justify the huge increases, describing them as “symptoms of a larger underlying problem in California’s individual market,” as in escalating costs. Good luck with that, since health costs aren’t going up anywhere near 30 percent per annum, even in the absence of comprehensive reform.

Talk about clueless. I mean, how often do a fairly conservative California Republican, like Poizner, and the Obama administration see eye to eye on a health care controversy? Pretty much never.

Notes Sebelius: “I am aware that the State of California is investigating this matter, and urge Anthem Blue Cross to cooperate fully. In the meantime, I will be closely monitoring the situation.”